Friday, September 24, 2010
Fixing the BCS: Is Tax Law the Trick?
As many college football fans know - this writer among them - the Bowl Championship Series ("BCS") is not without flaws. Since the inception of the BCS during the 1998 football season, the powers that be have tweaked the Series many times in an effort to address these shortcomings.
Yesterday, however, a group known as PlayoffPAC filed a complaint with the Internal Revenue Service in an effort to spur further change. What makes PlayoffPAC unique is not that it's an outside organization seeking change through the legal system - many challenges have been attempted against the BCS on antitrust grounds - but rather that they are attempting to change the BCS by way of tax law. In effect, PlayoffPAC is saying that the BCS has abused its status as a tax-exempt organization to "(i) pay excessive compensation to their executives, (ii) make undisclosed lobbyist contributions, (iii) intervene in political campaigns, and (iv) provide substantial private benefit to insiders."
How the IRS will come down on the issue remains to be seen, but, as this writer knows (and will be posting frequently on this topic thanks to his law review note), college football and basketball programs are pushing, and perhaps crossing over, the limits of what their tax-exempt charters allow.
While there are some deficiencies in PlayoffPAC's complaint, it will be interesting to see if tax law, rather than the outcry of many a college football fan, is what ultimately changes the BCS.
For further reading, check out this post by a very well regarded tax scholar. In his post he links to many popular press articles regarding PlayoffPAC's complaint.